Looking out across the changing energy landscape, it is exciting to observe a growing awareness and greater appreciation for district energy. Planners, policy makers and energy professionals from around the world are recognizing district energy as a proven, community-scale solution to enhance energy security, stimulate local economic development, and deliver more sustainable, lower-carbon energy services. District energy is gaining ground through more than simple window-dressing of government-subsidized demonstration projects, but through honest-to-goodness policy engagement designed to generate real industry growth.
Around the globe, and especially here in the U.S., district energy systems are now increasingly seen as effective investments for optimizing combined heat and power or tapping indigenous energy resources such as surplus industrial waste heat and renewable lake or ocean water. Whether this enhanced popularity is due to last year's record-high oil costs of $147 per barrel or to recent government activity on climate change legislation, district energy systems are gaining traction as a near-term carbon emissions mitigation strategy.
In the U.S., the U.S. Department of Energy (DOE) Industrial Technology Program has recently re-purposed the eight Regional Application Centers (RACs) to a broader mission that encompasses education, outreach and support for clean energy technologies, including district energy, combined heat and power and waste energy recovery. The RACs will be working to accelerate investment in larger-scale CHP of 20+ MW to achieve even greater market penetration for energy-efficient technologies that mitigate carbon emissions.
DOE has established an ambitious agenda for CHP to expand from 9 percent of U.S. electricity generation in 2008 to 20 percent by 2030. In the large commercial and industrial segment, this will involve the increase of over 82 GW of generating capacity from 77.6 GW in 2008 to reach 160 GW by 2030. Re-powering existing heat-only district systems in cities and campuses to adapt to combined heat and power is a key near-term market opportunity. Leveraging the potential for waste-heat recovery is another highly valuable strategy. IDEA is slated to provide technical program support to the RACs in pursuit of the district energy segment.
Also at the federal level, legislation has been introduced in the Senate Climate bill to increase support for district energy development. The Thermal Energy Efficiency Act (S. 1621), co-sponsored by Sen. Bernie Sanders, I-Vt., and by Sen. Jeff Merkley, D-Ore., is structured around the importance of thermal energy as a resource for heating and cooling buildings. The bill effectively sets aside revenue generated from the sale of carbon-dioxide emission allowances to provide grants and loans through the State Energy and Environmental Development (SEED) programs for development and expansion of district energy systems.
This legislation is also significant in that it is a rare exception: It does not focus legislative language entirely on electricity and provides program recognition and support for thermal energy. Since 40percent of all energy used in buildings is for heating and air conditioning, it only makes sense to have policies focus on thermal energy development and optimization, as contemplated in the Sanders-Merkley bill. The bill's genesis reflects a dozen or more community-scale, biomass -based, district energy development schemes under consideration in Vermont and New Hampshire.
At the state policy level, district energy and CHP have gained solid program footing in places like Massachusetts, with the Alternative Energy Portfolio Standard; Connecticut with the Clean Energy Fund; and New Jersey, with public benefit funds invested in highly efficient cogeneration via grants dispersed by the Board of Public Utilities. In fact, many states have been driving investment in clean energy technologies and will continue to lead in this area. IDEA will be covering state energy programs and an update on federal climate and energy policies as part of the agenda for the 23rd Annual Campus Energy Conference to be hosted by the University of Nevada, Reno, Feb. 9-12, 2010. (The distribution workshop precedes the conference Feb. 8-9.)
Of course, there is also real momentum outside the U.S. We just returned from the Fourth International District Cooling Conference, hosted by the IDEA Middle East Chapter in Dubai, United Arab Emirates. In the past 10 years, more than 1 million tons of district cooling capacity have been constructed in the Middle East, largely in the UAE.
While the global financial crisis has affected the pace of development in Dubai and difficult market corrections are under way, district cooling has been widely accepted as an important infrastructure alternative to traditional air-conditioning systems that transpose high peak demands on the power grid. Members of the IDEA Middle East Chapter are engaged in addressing the complicated market challenges of limited water supply, subsidized and inequitable electricity rates and providing customer satisfaction across the entire GCC region. The current economic slowdown presents an opportunity for industry participants to focus on best practices for improving energy efficiency and optimizing assets.
Certainly, the efforts by the International Energy Agency CHP/DHC Collaborative, led by Tom Kerr, have helped to raise the profile of district energy/CHP. The respective country reports highlight industry market share and describe the favorable policy settings that have allowed district energy and CHP to flourish.
IDEA is collaborating with the International Energy Agency, Euroheat & Power, the Danish Board of District Heating, and the Danish District Heating Association toorganize the District Energy Summit in Copenhagen Nov. 3. Since Copenhagen will host the United Nations Framework Convention on Climate Change in early December, the District Energy Summit is intended to showcase the tremendous contribution district energy has made in Denmark's successful transformation from energy dependent nation to net exporter. Large-scale district energy networks form the undergirding for a low-carbon economy in Copenhagen that should serve as blueprint for future urban planning around the world.
On Oct. 15, industry participants in the United Kingdom announced the formation of the U.K. District Energy Association (ukDEA) to promote the use of district energy as a means to reduce carbon emissions and to forge a stronger connection with government to better leverage industry growth. Government leaders in the U.K. helped to launch the ukDEA in Birmingham, calling the city a "beacon on decentralised energy."
Six main operating systems in the U.K. are the anchor members of the association. Some of these systems have been operating for nearly 30 years, and many utilize waste to energy as a main source of heating supply. The ukDEA association aims to improve information exchange, collaborate on development solutions, develop and share knowledge and best practices, expand appreciation for the benefits of district energy, and advocate for policies and regulations that are fair or favorable for industry participants.
This mission is entirely consistent with the long-held principles and practices of IDEA. In much the same way that IDEA has served as a collective industry voice with the U.S. Environmental Protection Agencyand Department of Energy, ukDEA plans to engage with the U.K.'s Department of Energy and Climate Change to improve communication between existing and potential scheme developers, operators, partners and users, aiming to support more robust industry growth.
As IDEA completes our 100th year in operation, it is encouraging that our mission and message are still relevant and resonating with others joining in the chorus and the cause.
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